Can a Real Estate Developer Forfeit the Booking Amount if a Homebuyer Backs Out?
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed a real estate developer in Thane to refund the booking amount after deducting 1% of the total flat value to a homebuyer who backed out due to financial difficulties.
Real EstateBooking AmountHomebuyerMahareraRefundReal Estate NewsJan 08, 2025
This decision comes after a homebuyer, Pulkesh G Majumdar, cancelled the booking of a ₹67 lakh apartment due to financial issues.
The CasePulkesh G Majumdar booked a flat worth ₹67 lakh and paid ₹1 lakh for the booking on April 3, 2022.
However, within 45 days, he cancelled the booking due to financial difficulties.
The developer, initially, had forfeited the entire booking amount, claiming it was in line with the forfeiture clause mentioned in the booking application form.
The homebuyer, however, alleged that the developer had sent an email agreeing to refund the entire amount after the booking was cancelled.
The developer contended before MahaRERA that the complaint was filed against the wrong entity, Puraniks Builders, whereas the booking was actually made with Sai Pushp Enterprises.
MahaRERA, in line with the principles of natural justice, overlooked this issue.
Can a Developer Forfeit the Entire Booking Amount?The developer had forfeited 1.5% of the total amount of the apartment, which was ₹67 lakh.
However, MahaRERA ruled that such forfeiture is not legal under the provisions of the Real Estate (Regulation and Development) Act (RERA).
MahaRERA stated that the order issued in August 2022 permits the developer to forfeit 1% of the total consideration in case of cancellation within 45 days.
This applies to transactions made before August 2022, as there was no prescribed format earlier.
MahaRERA’s DecisionMahaRERA, in a December 23, 2024 order, directed the developer to refund the money paid by the homebuyer towards the consideration of the flat without any interest, after deducting 1% of the total consideration (value) of the flat, excluding statutory dues paid to the government or brokerage, if any.
The developer has been given 45 days from the date of the order to comply with this directive.
Information on MahaRERAThe Maharashtra Real Estate Regulatory Authority (MahaRERA) is a government body established under the RERA to regulate the real estate sector in Maharashtra.
MahaRERA aims to protect the rights of homebuyers and ensure transparency and accountability in real estate transactions.
FAQs1.
Can a homebuyer cancel a booking due to financial difficulties? - Yes, a homebuyer can cancel a booking due to financial difficulties, but the developer is entitled to forfeit 1% of the total flat value as per MahaRERA guidelines.2.
What is the maximum amount a developer can forfeit if a booking is cancelled within 45 days? - According to MahaRERA, a developer can forfeit 1% of the total flat value if a booking is cancelled within 45 days.3.
Is the refund amount subject to interest? - No, the refund amount is not subject to interest, as per MahaRERA's directive.4.
What if the complaint is filed against the wrong entity? - MahaRERA can overlook this issue in compliance with the principles of natural justice.5.
Can homebuyers seek a refund due to job loss? - Yes, homebuyers can seek a refund due to job loss, and MahaRERA guidelines will apply in such cases.
Frequently Asked Questions
Can a homebuyer cancel a booking due to financial difficulties?
Yes, a homebuyer can cancel a booking due to financial difficulties, but the developer is entitled to forfeit 1% of the total flat value as per MahaRERA guidelines.
What is the maximum amount a developer can forfeit if a booking is cancelled within 45 days?
According to MahaRERA, a developer can forfeit 1% of the total flat value if a booking is cancelled within 45 days.
Is the refund amount subject to interest?
No, the refund amount is not subject to interest, as per MahaRERA's directive.
What if the complaint is filed against the wrong entity?
MahaRERA can overlook this issue in compliance with the principles of natural justice.
Can homebuyers seek a refund due to job loss?
Yes, homebuyers can seek a refund due to job loss, and MahaRERA guidelines will apply in such cases.
Related News Articles
Current Gold Prices in Major Indian Cities: Latest Rates and Updates
Stay updated with the latest gold prices for 10 grams of 22-carat gold in major Indian cities across India.
Equinox India Developments Limited: The New Face of Indiabulls Real Estate
Listed real estate developer Indiabulls Real Estate Limited has undergone a transformation, changing its name to Equinox India Developments Limited with effect from June 20, 2024.
Real Estate Entrepreneur Kamlesh Kumar Jailed in Ranchi Amid Money Laundering Probe
The Enforcement Directorate (ED) has arrested Real Estate businessman Kamlesh Kumar in Ranchi under the Prevention of Money Laundering Act (PMLA).
Navneet Rana to Skip Maharashtra Assembly Polls, Eyes Rajya Sabha Seat
Navneet Rana, a prominent political figure in Maharashtra, has announced that he will not contest in the upcoming Maharashtra Assembly elections. Instead, he is setting his sights on a membership in the Rajya Sabha. This decision comes after a series of s
Micromitti to Launch SM-REITs: A New Era for Real Estate Investment in Central India
Micromitti, a leading PropTech firm in Central India, is set to introduce Real Estate Investment Trusts (REITs), AIF Category 2 Real Estate Funds, and Private Equity (PE) investments, providing high-return opportunities for individual investors.
Bhopal Sees Property Rates Soar by Up to 200% in 243 Locations
Property rates in Bhopal have increased by up to 200% in 243 locations, including prime areas like Arera Colony, 10 Number Market, and MP Nagar, sparking opposition from builders and developers.